Monday, February 01, 2010

Fallond Stock Picks: Relief Bounce

Markets enjoyed a temporary respite after a couple days of heavy selling. Stochastics reached comparable oversold levels to that of October - although channel support has long since gone for the indices.

For the Nasdaq any relief bounce is likely to struggle at the 50-day MA as the 20-day MA works its way down towards an intermediate 'Death Cross'

The Dow is closer to a 'Death Cross' - it has been a while since the 20-day MA cut below the 50-day MA; this will make 20-day MA resistance.

There were bigger gains in the semiconductor index with an inside day.

The S&P went a step better and closed above Friday's open. A push above 1,100 would give the rally some momentum.

Bulls have a chance to make the rally work with the S&P best placed to make progress.

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